1. Field of the Invention
The present invention relates to electrical power distribution systems and, more specifically, to switches used with distributed generation power systems.
2. Description of the Prior Art
Typically, electric power is generated at large scale central generating plants owned by electric utilities and then distributed to local users via a power grid.
Generally, the utilities' long term fixed costs are relatively stable, but short term demand and price fluctuations (for both electricity, and is some instances the fuel used in generation) can be highly unstable. The utility has to provide energy to its customers during all types of demand situations. If a utility designs its fixed assets to meet the highest imaginable demand on the worst day, its assets will be grossly underutilized most of the time. Therefore, the utilities often go to the futures market to secure long term contracts to meet historical demand. However, if certain environmental factors, such as the weather, do not behave as predicted, the utilities can be caught substantially short of supply and have to go to the spot market and pay prices that are significantly higher than what they can charge customers. Consumers under the traditional utility scenario are shielded from these price, supply and demand fluctuations by regulated rates. As a result, the risk and loss is absorbed by the utility and not passed on and the utility really sees the short term instabilities in cost, of which the consumer is unaware. Many of "peaking" plants have been built to take advantage of these instabilities on the wholesale side. Such plants run only when prices get to a certain level.
Local fuel costs may also vary in the shirt term. For example, natural gas prices may be relatively low during the summer months when heating demand is low. They may also vary as a result in short term fluctuations in supply. Therefore, it may be economically feasible to generate electricity locally during periods of low fuel prices and high electricity prices, while it would not be economically feasible to generate locally during periods of high fuel prices and low electricity prices.
Although some homes have local generators, these generators are usually kept on hand for emergency power outages. Configuration of local generators is usually done manually, with local generation being employed during a power outage and the utility power grid being employed once power is restored to the grid. Aside from emergency usage, local generation of electricity using small generators at the consumer's home is not currently widespread because there is no system that efficiently causes power to be supplied by a local generator when local generation is less expensive and supplied by the power grid when local generation is more expensive. For this reason, many homeowners cannot justify the investment in a generator for backup power only.
Therefore, there is a need for a system that allocates power usage between a utility power grid and a local generator based on economic factors such as the relative costs to generate.